SEBI is planning onto tightening the rules for public offers of small and medium enterprises (SMEs) according to two sources, post complaints of misuse of a separate listing platform introduced in 2012 to enable small businesses access the capital markets.
The regulator, the Securities and Exchange Board of India (SEBI), is considering to raise the minimum size of such public offering to 300 million to 500 million Indian Rupees, as per the sources, who have claimed to be directly familiar with the discussions, cited by Deccan Herald.
The sources have added that the new rules will be published later this year, after the regulator and exchanges consult stakeholders.
Meanwhile, currently, there is no minimum issue size prescribed but companies listing on the platform are required to have a post issue capital base of 250 million rupees.
“A minimum offer size will ensure that serious companies are accessing the capital markets and in turn safeguard the interest of investors,” said one of the two sources, who has requested anonymity since they were not authorized to speak to the media.
SMEs in India are defined as companies with an annual turnover of 50 million to 2.5 billion rupees.
